Nintendo to pay royalties for every 3DS after patent breach ruling

Nintendo will be forced to pay royalties on every Nintendo 3DS unit every sold, after a court ruling over a patent infringement.

A court has ruled against Nintendo, stating that the Japanese company has infringed a patent with its glasses-free 3D technology.

The court has ruled that Nintendo must now pay royalties on every Nintendo 3DS handheld console ever sold to the patent holder Tomita Technologies.

For now, Nintendo will have to give $3 (£2) to Tomita Technologies per 3DS unit. At first, Tomita Technologies wanted Nintendo to pay a flat rate for every unit sold, but Judge Rakoff said that would be unfair because the console will naturally decrease in price over time.

“If, as Tomita suggests, the ongoing royalty rate were expressed as a flat dollar amount per unit sold, Tomita would capture an increasingly large proportion of each sale as the price falls, even as the technology’s reliance on the infringed patent remains constant,” said Judge Rakoff in the statement. “This would result in an unearned windfall for Tomita, and, accordingly, the court prefers an ongoing royalty rate expressed as a percentage of wholesale price.”

Current Nintendo 3DS sales figures stand at approximately 35 million. This will set back the (rather struggling) Japanese games manufacturer around $105 million (£63.9 million) and this will only rise as more 3DS and Nintendo 3DS XL consoles are sold.

This is the second time Nintendo has had to pay up for a patent infringement to Tomita Technologies. In March 2013, Nintendo lost a court battle against Tomita Technologies and was initially ordered to pay $30.2 million (£18.3 million), but eventually only had to fork out $15.1 million (£19.1 million).

However, it's not all doom and gloom, as Nintendo's share prices have surged following the Chinese government's decision to temporarily lift the console ban.

Nintendo's shares jumped 11 per cent to 15,850 on the Tokyo Stock Exchange following the announcement.

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